Increase in accidents following the lifting of curfews and restriction of movements plunged general insurance companies into a Sh4.1 billion underwriting loss in the nine months to September 2021.
The insurers had recorded a loss of Sh879.28 million a year earlier. The loss mainly came from motor classes of insurance business which comprised of 52.3 per cent of total claims incurred compared to their contribution of 29.5 per cent of the total premium under general insurance business.
Private and commercial motor vehicle earned insurers Sh35.8 billion in premiums but cost the industry Sh26.8 billion in insurance claims.
“The general insurance business underwriters reported an increase in underwriting loss to Sh4.13 billion compared to a loss Sh879.28 million reported in (third quarter) of 2020,” IRA chief executive Godfrey Kiptum said.
“This was mainly attributed to high increase in loss ratios in motor private and motor commercial classes of insurance business due to relaxation of restrictions that had been imposed on travel due to Covid-19 pandemic,” he said.
Restriction of movement, lockdowns and night curfew in 2020 saw motor claims reduced to Sh22.1 billion from Sh23.4 billion in 2019. The claims have jumped to Sh26.8 billion following relaxation of Covid-19 restrictions on movement.
Insurance companies faced a higher increase in personal motor vehicle claims which increased from Sh11.5 billion to Sh14.9 billion. Motor Commercial jumped from Sh10.6 billion to Sh11.8 billion.
A similar experience hit medical insurers as claims jumped 29 per cent from Sh15.1 billion to Sh19.5 billion during the period under review.
Health insurance companies made underwriting profits last year from a loss making position the previous year as Kenyans stayed away from hospitals amid fears of contracting coronavirus.
At the height of the pandemic, the government imposed restrictions on movement including curbs into Nairobi City which saw a decline in patient numbers.
Even as the windfall unwinds with higher medical claims, insurance companies have also been able to grow health insurance premiums 12.7 per cent as more Kenyans sought medical cover in the wake of the health crisis.
Medical insurance premiums for the nine months to September stood at Sh40.8 billion, up from Sh36.2 billion the previous year.
The pandemic continues to shape citizens’ behaviour and business performance even as the country adjusts with increased vaccinations to combat the virus.
IRA has compelled health insurance companies to cover the pandemic and include Covid-19 jab in their policies.